It's as if they 'closed' the market: Technician

They say the wait is the hardest part, and that's certainly been the case for both the bulls and the bears with stocks this year.

Despite the fact that the S&P 500 is sitting near record highs, one top technician sees a storm brewing for stocks, and the root of that concern comes not from how much stocks have moved, but rather how little.

"The S&P 500 is trading within its tightest range to start of a year in almost a decade," technical analyst Carter Worth said Tuesday on CNBC's "Futures Now." "It's almost as if they closed the market."

Worth noted that since the start of January, S&P 500 has traded within a 125 point range, or roughly 6.3 percent. That's the smallest peak-to-trough range for the start of a year since 2006.

But despite the narrow range, Worth said the market is far from quiet. "I would characterize this as a high volatility, low variance market where we see these wild swings and yet we're going nowhere," he said. Because of the churning action, he sees stocks breaking to the downside.

Worth, who has long maintained his bearish stance on the market despite its record rally, admitted that this pattern could be either "the stall before the storm or the pause that refreshes." But he is just as convinced as ever that investors should brace for a substantial pullback.

"We like to look at the different parts of the market, because the parts compose the whole, and the way that individual securities are acting is telling us that ultimately this malaise will resolve down," said Worth, head of technical analysis at Cornerstone Macro.

According to Worth, the market needs a "good healthy reset" of at least 10 percent in order to return to advance further. "It has to be 10 percent or greater to keep this [bull market] going," he said. "Otherwise we are on borrowed time."

Whether the market breaks out or sells off, Worth doesn't see the current range lasting much longer. "It's exceedingly rare that the market could be this range bound for this many months," said Worth. "There's got to be something coming that resolves it."

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